Massachusetts targets employer fraud

HOLYOKE - The underground economy of workers being paid in cash, not getting overtime, or being unlawfully called "independent contractors" costs Massachusetts $100 million in unpaid income tax payments and another $100 million in unpaid workers compensation each year, according to a Harvard study.

State officials came to Holyoke today to talk over ways to put a stop to those practices and get underground workers back in the legitimate economy.

Advocates for immigrants fear state efforts to crack down on employers who pay workers "under the table" will hurt the illegal immigrants who often take those jobs.

Massachusetts Director of Labor George E. Noel tried to allay those fears today during an information session on the states' new Joint Task Force on the Underground Economy and Employee Misclassification, hosted at Holyoke Community College's Kitteredge Center for Business and Workforce Development.

Noel said the task force's target is employers who break the law, not employees, who he considers victims.

"We're not interested in anybody's immigration status," Noel said. "We have no interest in cooperating with immigration authorities. We have enough on our plate making sure people comply with the laws of the commonwealth."

The meeting was the first of seven regional meetings the Task Force is conducting around Massachusetts, with one scheduled Friday in Pittsfield.

According to a 2004 Harvard study, as many as one in seven construction industry workers is either hired off the books or illegally classified as an independent contractor.

Across all industries, the state Department of Labor believes 13 percent of employers under-report workers wages and unemployment insurance tax liability to the state.

Gov. Deval L. Patrick established the task force in March. A tip line, (877) 96-LABOR, and the Web site mass.gov/labortaskforce allow people to anonymously report illegal employment practices.

But Joel D. Rodriguez of Springfield, a member of Alliance to Develop Power, or ADP, said the tip line could be used by people who don't like immigrants and want to see them lose their jobs, instead of by immigrants who are being exploited.

"There will be roundups," Rodriguez said. "There is a lot of fear."

He said groups like ADP, formerly known as the Anti-Displacement Center, are the best way to root out employers exploiting people, citing a Springfield case where workers were paid in scrap metal taken from the work site.

A number of ADP members chanted and shouted during the meeting, but left before everyone had testified.

Both Noel and Michael G. Bradley, executive director of the task force, promised to meet with ADP, but defended the tip line as an important information-gathering tool.

Bradley, a former Norfolk County prosecutor, said the task force has already begun 20 investigations based on tip-line information. He said he couldn't yet reveal details of those cases.